The Survive and Thrive Boomer Guide

Under Trump, enforcement of consumer financial laws drops sharply, especially in areas with the highest complaints

The number of publicly announced enforcement actions under the Trump administration at the Consumer Financial Protection Bureau is dropping sharply, according to a report by the Consumer Federation of America.

“Law enforcement activity at the CFPB has dropped precipitously under the Trump Administration’s leadership,” said Christopher Peterson, director of financial services for the federation and author of the report.

The bureau is charged with enforcing federal consumer financial law and bringing legal action against companies that violate that law. The bureau also has the authority to seek restitution for consumers and levy fines when it finds violations. The report finds that activity in both of these areas is on the decline – overall enforcement activity is down by 80 percent from the bureau’s peak in enforcement actions in 2015 and average relief to victims is down by 96 percent per case.

Education Department fails to adequately supervise student loan servicers, federal watchdog says

Student loan debt is now the second largest debt in the United States with only mortgage debt higher. And, since 2013, most people aren’t able to discharge their student loan debts through bankruptcy.

That’s what makes a report from the Office of the Inspector General of the U.S. Department of Education, which is highly critical of how the department is handling federal student loan servicers, disturbing. A loan servicer is a company that handles the billing and other services on a federal student loan.

In an audit, the inspector general found that Federal Student Aid, an office of the department, hadn’t adequately supervised student loan servicers.

As Valentine’s Day approaches and throughout the year, watch out for romance scams

Romance scams are different from other scams. Fraudsters prey on lonely people looking to connect with someone, and the scam can often take months to develop to the point where money changes hands. The emotional harm to the victim can be even more painful than the money lost. 

The use of online dating sites and apps has made romance fraud easier. Victims in the United States and Canada report losing nearly $1 billion over the last three years, and the Better Business Bureau estimates there may be more than a million victims in the U.S. Because most people don’t file complaints about romance scams with the BBB or law enforcement, this may a small number of those affected.

The BBB’s study, “Online Romance Scams: How Scammers Use Impersonation, Blackmail, and Trickery to Steal from Unsuspecting Daters,” looks at how romance scams work, who the scammers are, and what’s being done to combat them.

Federal actions against corporations continue to drop in Trump’s second year, despite his ‘tough on crime’ rhetoric

Under President Donald Trump, the “tough on crime” president, corporate enforcement actions at the U.S. Department of Justice fell for the second year in a row, according to a Public Citizen report.

In Trump’s second year, the DOJ completed just 227 cases against corporate offenders, 14 fewer than in 2017, and down heavily from 308 in President Barack Obama’s final year in office.

While the Trump DOJ’s financial penalties did increase to $15.7 billion in 2018 from $4.9 billion, the 2018 level is below Obama-era penalties. In addition, the report states that 62 percent of the 2018 total is attributable to just four cases against big banks – Royal Bank of Scotland, Wells Fargo, Barclays, and HSBC – which were initiated by the Obama administration for financial crisis-era allegations.

Top 14 consumer stories of 2018

All in all, it’s been another bad year for consumers. President Trump and his administration’s generate so much chaos that they get all the media attention. Meanwhile in the background, federal agencies are moving forward on the administration’s conservative regulatory priorities, which are harmful to consumers. One bright spot is the Democrats taking control of the U.S. House of Representatives. That will help curb President Trump's excesses.

Here are the top 14 consumer stories for 2018:

1. The Trump administration continues decimated consumer protections.

President Trump appointed Mick Mulvaney, his budget director, as head of the Consumer Financial Protection Bureau. Under Mulvaney's leadership, the bureau reversed prior actions and programs of the agency. It has delayed rules to protect consumers from payday lenders, dropped lawsuits, stripped enforcements of fair-lending protections, and reduced the number of fines issued.

Sterling Jewelers agrees to $11 million settlement for signing consumers up for store credit cards without their consent

Photo credit: M.O. Stevens

Sterling Jewelers Inc. has agreed to pay $11 million after investigations by the New York Attorney General’s Office and the Consumer Financial Protection Bureau found that Sterling signed consumers up for store credit cards without the consumers’ knowledge or consent. Sterling also enrolled consumers in a credit insurance product without consumers’ knowledge or consent and misrepresented the terms of the store cards. Under to the settlement, Sterling will pay $11 million in penalties.

“By tricking consumers into enrolling in store credits cards, Sterling Jewelers betrayed customers’ trust and violated the law,” said New York Attorney General Letitia James. “This settlement holds the company accountable for its misconduct and ensures that no more consumers are deceived.”

Sterling, doing business as Kay Jewelers, Jared The Galleria of Jewelry, and other brands, is based in Ohio and operates about 1,500 jewelry stores throughout the United States.

Fiat Chrysler agrees to pay $800 million to settle charges of emissions cheating

Fiat Chrysler Automobiles and Robert Bosch agreed Thursday to settle charges related to “defeat device” software intended to circumvent emissions standards for air pollutants. Bosch, a parts supplier, supplied and programed the software used by Fiat Chrysler and Volkswagen in diesel vehicles.

The two agreements, to be filed later this month, will provide compensation for consumers who purchased or leased Fiat Chrysler vehicles containing illegal defeat devices and more than $172.5 million to 49 states, the District of Columbia, Guam, and Puerto Rico.

Fiat Chrysler and Bosch attempted to pull the wool over the eyes of American consumers, and pollute their way to the bank, said New York Attorney General Letitia James.

Trump’s government shutdown is disrupting agencies that protect consumers, workers, health, and safety

Consumer, worker, health, and safety protection agencies throughout the federal government are being disrupted by federal worker furloughs coming from the partial government shutdown, according to a report Public Citizen released Wednesday.

“As long as the shutdown continues, essential consumer, worker, health and safety protections carried out by these agencies are on hold,” said Robert Weissman, president of Public Citizen. “Corporate lawbreakers are going unpunished, safety inspections are being postponed, discrimination charges are going uninvestigated, polluters are not being held in check, financial fraudsters are not being policed, consumer complaints are not being received and accident investigations have ceased.”

Many agencies are falling behind, and it could take many weeks for them to catch up, according to furloughed workers quoted in the report. More than 75 percent of workers have been furloughed at seven agencies dedicated to protecting consumers and workers, according to federal agency memos, and nearly 50,000 employees have been sent home without pay at the following agencies:

Loan servicer settles charges it deceived student borrowers about lower-cost payment plans and loan forgiveness

Federal student loan servicer ACS Education Services agreed to a $9 million settlement Friday for steering distressed borrowers away from income-based repayment plans towards other, more expensive options. It also addresses claims that ACS deceived borrowers about the availability of loan forgiveness after a borrower works for 10 years in a public-service job. 

In addition to paying penalties and restitution to borrowers, ACS has agreed not to service loans for the major federal programs or private loans for five years. Most eligible borrowers will receive between $100 and $450. 

“Students rely on college to be a ladder to success, but too often prohibitive costs and disingenuous loan servicers trap students in a quicksand of debt,” said New York Attorney General Letitia James. “ACS has systematically failed borrowers by refusing to educate them on more effective federal repayment options, and instead, pushing them towards options that padded their bottom line.”

For-profit college to pay more than $493 million in debt relief to students due to fraudulent practices

Forty-eight attorneys general announced an agreement Thursday with for-profit education company Career Education Corp. to reform its recruiting and enrollment practices and offer debt relief of about $493.7 million to 179,529 students nationally.

CEC currently offers mostly online courses through American InterContinental University and Colorado Technical University. CEC has closed or phased out many of its schools over the past 10 years. They include Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College, and Sanford-Brown. 

The agreement resolves a five-year investigation into allegations that CEC made misleading statements or failed to disclose information to prospective students on total costs, transferability of credits, program offerings, job placement rates, and other topics.